Entravision Communications Corp 10-Q for FY2025 Q1
Entravision Communications Corp (EVC)
About this 10-Q
Entravision Communications Corp filed this 10-Q on May 8, 2025, covering the quarter ended March 31, 2025 (FY2025 Q1).
Headline figures
Quarter ended March 31, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $91.85M
- up 17.5% from $78.18M a year earlier
- Net loss
- $47.97M
- compared with a net loss of $48.89M a year earlier
- Diluted EPS
- -$0.53
- compared with -$0.55 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(MARK ONE)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FOR THE QUARTERLY PERIOD ENDED
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation or organization) |
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(I.R.S. Employer Identification No.) |
(Address of principal executive offices) (Zip Code)
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(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:
Large accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No
As of May 5, 2025, there were
ENTRAVISION COMMUNICATIONS CORPORATION
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2025
TABLE OF CONTENTS
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Page Number |
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ITEM 1. |
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4 |
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CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) AS OF MARCH 31, 2025 AND DECEMBER 31, 2024 |
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4 |
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5 |
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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED) FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 2025 AND MARCH 31, 2024 |
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CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED) FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 2025 AND MARCH 31, 2024 |
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7 |
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8 |
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) |
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ITEM 2. |
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
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ITEM 3. |
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33 |
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ITEM 4. |
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33 |
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ITEM 1. |
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34 |
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ITEM 1A. |
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34 |
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ITEM 2. |
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34 |
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ITEM 3. |
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34 |
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ITEM 4. |
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34 |
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ITEM 5. |
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34 |
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ITEM 6. |
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35 |
GENERAL NOTE
As discussed in more detail in our Annual Report on Form 10-K for the year ended December 31, 2024 (our “2024 10-K”), and throughout this report, during the second quarter of 2024 we sold our Entravision Global Partners, or EGP, business. Unless the context indicates otherwise, references throughout this report to discontinued operations refer to EGP prior to its sale.
Effective July 1, 2024, we realigned our operating segments into two segments – media and advertising technology & services – consistent with our current operational and management structure. Our reportable segments are the same as our operating segments. Prior periods have been recast to conform to this presentation throughout this report. See “Management’s Discussion and Analysis of Results of Operations” and Note 2 to Notes to Consolidated Financial Statements.
Forward-Looking Statements
This document contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to, any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing.
Forward-looking statements may include the words “may,” “could,” “will,” “estimate,” “intend,” “continue,” “believe,” “expect”, “anticipate” or other similar words. These forward-looking statements present our estimates and assumptions only as of the date of this report. Except for our ongoing obligation to disclose material information as required by the federal securities laws, we do not intend, and undertake no obligation, to update any forward-looking statement.
Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties. Some of the key factors impacting these risks and uncertainties include, but are not limited to:
2
For a detailed description of these and other factors that could cause actual results to differ materially from those expressed in any forward-looking statement, please see the section entitled “Risk Factors,” beginning on page 12 of our 2024 10-K.
3
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ENTRAVISION COMMUNICATIONS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In thousands, except share and per share data)
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March 31, |
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December 31, |
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2025 |
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2024 |
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ASSETS |
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Current assets |
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Cash and cash equivalents |
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$ |
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$ |
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Marketable securities |
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Restricted cash |
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Trade receivables, (including related parties of $ |
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Assets held for sale |
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- |
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Prepaid expenses and other current assets (including related parties of $ |
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Total current assets |
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Property and equipment, net of accumulated depreciation of $ |
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Intangible assets subject to amortization, net of accumulated amortization of $ |
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Intangible assets not subject to amortization |
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Goodwill |
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Deferred income taxes |
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Operating leases right of use asset |
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Other assets |
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Total assets |
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$ |
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$ |
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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Current liabilities |
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Current maturities of long-term debt |
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$ |
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$ |
- |
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Accounts payable and accrued expenses (including related parties of $ |
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Operating lease liabilities |
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Total current liabilities |
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Long-term debt, less current maturities, net of unamortized debt issuance costs of $ |
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Long-term operating lease liabilities |
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Other long-term liabilities |
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Deferred income taxes |
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Total liabilities |
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Stockholders' equity |
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Class A common stock, $ |
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Class U common stock, $ |
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Additional paid-in capital |
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Accumulated deficit |
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( |
) |
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( |
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Accumulated other comprehensive income (loss) |
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( |
) |
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( |
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Total stockholders' equity |
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Total liabilities, redeemable noncontrolling interest and equity |
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$ |
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$ |
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See Notes to Condensed Consolidated Financial Statements
4
ENTRAVISION COMMUNICATIONS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except share and per share data)
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Three-Month Period |
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Ended March 31, |
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2025 |
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2024 |
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Net Revenue |
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$ |
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$ |
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Expenses: |
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Cost of revenue |
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Direct operating expenses (including related parties of $ |
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Selling, general and administrative expenses |
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Corporate expenses (including non-cash stock-based compensation of $ |
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Depreciation and amortization (including related parties of $ |
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Change in fair value of contingent consideration |
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- |
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( |
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Impairment charge |
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- |
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Loss on lease abandonment |
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- |
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Foreign currency (gain) loss |
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Operating income (loss) |
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( |
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( |
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Interest expense |
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( |
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( |
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Interest income |
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Dividend income |
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- |
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Realized gain (loss) on marketable securities |
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1 |
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( |
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Gain (loss) on debt extinguishment |
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- |
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( |
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Income (loss) from continuing operations before income taxes |
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( |
) |
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( |
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Income tax benefit (expense) |
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Net income (loss) from continuing operations |
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( |
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( |
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Net income (loss) from discontinued operations, net of tax |
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( |
) |
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( |
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Net income (loss) attributable to common stockholders |
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$ |
( |
) |
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$ |
( |
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Basic and diluted earnings per share: |
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Net income (loss) per share from continuing operations, basic and diluted |
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$ |
( |
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$ |
( |
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Net income (loss) per share from discontinued operations, basic and diluted |
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$ |
( |
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$ |
( |
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Net income (loss) per share attributable to common stockholders, basic and diluted |
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$ |
( |
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$ |
( |
) |
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Cash dividends declared per common share |
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$ |
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$ |
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Weighted average common shares outstanding, basic and diluted |
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See Notes to Condensed Consolidated Financial Statements
5
ENTRAVISION COMMUNICATIONS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
(In thousands)
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Three-Month Period |
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Ended March 31, |
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2025 |
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2024 |
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Net income (loss) attributable to common stockholders |
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$ |
( |
) |
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$ |
( |
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Other comprehensive income (loss), net of tax: |
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Change in foreign currency translation |
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- |
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- |
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Change in fair value of marketable securities |
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Total other comprehensive income (loss) |
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Comprehensive income (loss) attributable to common stockholders |
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$ |
( |
) |
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$ |
( |
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See Notes to Condensed Consolidated Financial Statements
6
ENTRAVISION COMMUNICATIONS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands, except share and per share data)
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Number of Common Shares |
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Common Stock |
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Accumulated |
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Additional |
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Accumulated |
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Other |
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Class A |
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Class U |
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Class A |
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Class U |
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Capital |
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Deficit |
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Income (Loss) |
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Total |
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Balance, December 31, 2024 |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
( |
) |
$ |
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Stock-based compensation expense |
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- |
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- |
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- |
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- |
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- |
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- |
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Dividends paid |
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- |
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- |
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- |
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- |
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( |
) |
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- |
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- |
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( |
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Dividends equivalents payable |
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- |
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- |
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- |
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- |
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( |
) |
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- |
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- |
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( |
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Change in fair value of marketable securities |
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- |
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- |
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- |
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- |
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- |
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- |
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OCI release due to realized gain (loss) on marketable securities |
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- |
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- |
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- |
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- |
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- |
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- |
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( |
) |
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( |
) |
Net income (loss) attributable to common stockholders |
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- |
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- |
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- |
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- |
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- |
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( |
) |
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- |
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( |
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Balance, March 31, 2025 |
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( |
) |
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( |
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Number of Common Shares |
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Common Stock |
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Accumulated |
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Additional |
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Accumulated |
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Other |
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Class A |
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Class U |
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Class A |
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Class U |
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Capital |
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Deficit |
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Income (Loss) |
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Total |
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Balance, December 31, 2023 |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
( |
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$ |
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Issuance of common stock upon exercise of stock options or awards of restricted stock units |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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Tax payments related to shares withheld for share-based compensation plans |
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- |
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- |
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- |
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- |
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( |
) |
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- |
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- |
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( |
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Stock-based compensation expense |
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- |
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- |
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- |
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- |
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- |
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- |
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Dividends paid |
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- |
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- |
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- |
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- |
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( |
) |
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- |
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- |
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( |
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Dividends equivalents payable |
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- |
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- |
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- |
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- |
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( |
) |
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- |
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- |
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( |
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Change in fair value of marketable securities |
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- |
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- |
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- |
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- |
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- |
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- |
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OCI release due to realized gain (loss) on marketable securities |
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- |
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- |
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- |
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- |
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- |
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- |
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Foreign currency translation gain (loss) |
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- |
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- |
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- |
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- |
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- |
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- |
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( |
) |
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( |
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Net income (loss) attributable to common stockholders |
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- |
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- |
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- |
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- |
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- |
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( |
) |
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- |
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( |
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Balance, March 31, 2024 |
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( |
) |
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( |
) |
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See Notes to Condensed Consolidated Financial Statements
7
ENTRAVISION COMMUNICATIONS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands)
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Three-Month Period |
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Ended March 31, |
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2025 |
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2024 |
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Cash flows from operating activities: |
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Net income (loss) attributable to common stockholders |
$ |
( |
) |
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$ |
( |
) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
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Depreciation and amortization |
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Impairment charge |
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Loss on lease abandonment |
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- |
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Deferred income taxes |
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( |
) |
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( |
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Non-cash interest |
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Amortization of syndication contracts |
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Payments on syndication contracts |
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( |
) |
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( |
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Non-cash stock-based compensation |
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(Gain) loss on marketable securities |
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(1 |
) |
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(Gain) loss on disposal of property and equipment |
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(Gain) loss on debt extinguishment |
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- |
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Change in fair value of contingent consideration |
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- |
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( |
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Net income (loss) attributable to redeemable noncontrolling interest - discontinued operations |
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- |
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( |
) |
Changes in assets and liabilities: |
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(Increase) decrease in accounts receivable |
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( |
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(Increase) decrease in prepaid expenses and other current assets, operating leases right of use asset and other assets |
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( |
) |
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( |
) |
Increase (decrease) in accounts payable, accrued expenses and other liabilities |
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( |
) |
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Net cash provided by (used in) operating activities |
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( |
) |
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Cash flows from investing activities: |
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Purchases of property and equipment |
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( |
) |
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( |
) |
Purchases of marketable securities |
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( |
) |
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- |
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Proceeds from sale of marketable securities |
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Net cash provided by (used in) investing activities |
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( |
) |
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Cash flows from financing activities: |
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Tax payments related to shares withheld for share-based compensation plans |
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- |
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( |
) |
Payments on debt |
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- |
|
|
|
( |
) |
Dividends paid |
|
( |
) |
|
|
( |
) |
Distributions to noncontrolling interest |
|
- |
|
|
|
( |
) |
Payment of contingent consideration |
|
- |
|
|
|
( |
) |
Principal payments under finance lease obligation |
|
( |
) |
|
|
( |
) |
Net cash provided by (used in) financing activities |
|
( |
) |
|
|
( |
) |
Effect of exchange rates on cash, cash equivalents and restricted cash |
|
- |
|
|
|
( |
) |
Net increase (decrease) in cash, cash equivalents and restricted cash |
|
( |
) |
|
|
|
|
Cash, cash equivalents and restricted cash: |
|
|
|
|
|
||
Beginning |
|
|
|
|
|
||
Ending |
$ |
|
|
$ |
|
||
Supplemental disclosures of cash flow information: |
|
|
|
|
|
||
Cash payments for: |
|
|
|
|
|
||
Interest |
$ |
|
|
$ |
|
||
Income taxes |
$ |
|
|
$ |
|
||
Supplemental disclosures of non-cash investing and financing activities: |
|
|
|
|
|
||
Capital expenditures financed through accounts payable, accrued expenses and other liabilities |
$ |
|
|
$ |
|
||
Dividends equivalents payable |
$ |
|
|
$ |
|
||
See Notes to Condensed Consolidated Financial Statements
8
ENTRAVISION COMMUNICATIONS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. BASIS OF PRESENTATION
Presentation
The condensed consolidated financial statements included herein have been prepared by Entravision Communications Corporation (the “Company”), pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted pursuant to such rules and regulations. These condensed consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2024 included in the Company’s 2024 Annual Report on Form 10-K for the year ended December 31, 2024 (the "2024 10-K"). The unaudited information contained herein has been prepared on the same basis as the Company’s audited consolidated financial statements and, in the opinion of the Company’s management, includes all adjustments (consisting of only normal recurring adjustments) necessary for a fair presentation of the information for the periods presented. The interim results presented herein are not necessarily indicative of the results of operations that may be expected for the full fiscal year ending December 31, 2025 or any other future period.
Certain amounts in the Company’s prior year period condensed consolidated financial statements and notes to the financial statements have been reclassified to conform to current period presentation, including presentation of discontinued operations as discussed in Notes 2, 5 and 7.
2. THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
The Company owns and operates one of the largest groups of Spanish language television and radio stations in the United States. Its mission is to serve its Latino audience as a trusted provider of useful news, information and entertainment and to serve its advertisers by providing multi-channel marketing capabilities to engage its audience. The Company also owns and operates a smaller group of television stations that broadcast English language programming and has operations that provide programmatic advertising technology and services.
The Company has organized its operations into
As discussed below, in 2024, the Company discontinued and divested a significant portion of its operations, which consisted primarily of several acquisitions that had been completed prior to 2024, and which operations comprised the majority of the Company’s former digital segment.
For more information and an overview of the Company's business, please refer to Part I, Item 1, "Business", of the Company's 2024 10-K.
Discontinued Operations and Assets Held for Sale
On March 4, 2024, the Company received a communication from Meta Platforms, Inc. (“Meta”) that it intended to wind down its Authorized Sales Partners ("ASP") program globally and end its relationship with all of its ASPs, including the Company, by July 1, 2024. For the fiscal year ended December 31, 2023 ASP revenue from Meta represented approximately
As a result of this communication from Meta, the Company conducted a thorough review of its digital strategy, operations and cost structure, and during the second quarter of 2024 made the decision to dispose of the operations of its EGP business. Following this decision, during the second quarter of 2024, the Company entered into a definitive agreement to sell substantially all of its EGP business to IMS Internet Media Services, Inc. ("IMS"). The transaction was completed on June 28, 2024. The remaining parts of the Company's EGP business, Jack of Digital ("Jack of Digital") and Adsmurai, S.L. ("Adsmurai"), were each sold back to their respective founders in separate transactions during the second quarter of 2024. See Note 7 for additional details.
A business or asset is classified as held for sale when management having the authority to approve the action commits to a plan to sell the business, the sale is probable to occur during the next 12 months at a price that is reasonable in relation to its current fair value, and when certain other criteria are met. A business or asset classified as held for sale is recorded at the lower of (i) its carrying amount and (ii) estimated fair value less costs to sell. When the carrying amount of the business exceeds its estimated fair value less
9
costs to sell, a loss is recognized and updated each reporting period as appropriate. Depreciation is not recorded on assets classified as held for sale.
The results of operations of a business classified as held for sale are reported as discontinued operations if the disposal represents a strategic shift that will have a major effect on the entity’s operations and financial results. When a business is identified for discontinued operations reporting: (i) results for prior periods are retrospectively reclassified as discontinued operations; (ii) results of operations are reported in a single line, net of tax, in the consolidated statement of operations; and (iii) assets and liabilities are reported as held for sale in the consolidated balance sheets in the period in which the business is classified as held for sale.
The Company concluded that the assets of its EGP business met the criteria for classification as held for sale. Additionally, the Company determined that the disposal, which was initiated and completed during the second quarter of 2024, represented a strategic shift that had a major effect on the Company's operations and financial results. As such, the results of the Company's former EGP business are presented as discontinued operations in the Consolidated Statements of Operations for all periods presented. Prior periods have been adjusted to conform to the current presentation. There were no remaining assets and liabilities of discontinued operations in the Consolidated Balance Sheets as of December 31, 2024 and March 31, 2025.
In March 2025, the Company entered into a letter of intent (“LOI”) to sell the assets of its
Liquidity
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. Management has evaluated whether there are any conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern over the next twelve months from the issuance of the accompanying consolidated financial statements.
The 2023 Credit Agreement contains various financial covenants. Compliance with these financial covenants is measured quarterly and the Company’s failure to meet the covenant requirements would constitute an event of default. In such event, if the Company were unable to obtain the necessary waivers or amendments, all outstanding borrowings, together with accrued and unpaid interest and other amounts payable thereunder, would become immediately due and payable. Additionally, the lenders would have the right to proceed against the collateral granted to them to secure that debt, which includes substantially all of the Company’s assets.
As a result of the sale of the EGP business, the Company’s consolidated EBITDA (as defined in the 2023 Credit Agreement) has been, and is expected to remain, significantly reduced and, in response, the Company has taken action to reduce certain expenses to mitigate this condition, including a reduction in the base salary and cash bonus components of the Company's three most senior executives' compensation. The Company also has $
As of March 31, 2025, the Company was in compliance with the financial covenants in the 2023 Credit Agreement. Based on the Company’s current financial projections and ability to prepay its debt, management believes that the Company will maintain compliance with its financial covenants in the 2023 Credit Agreement. Given the inherent uncertainty in financial projections the Company has identified additional controllable cost reduction actions that can be taken, if necessary, to maintain sufficient liquidity to fund its business activities and to maintain compliance with its financial covenants.
Management further believes that the Company’s existing cash and projected operating cash flows are adequate to meet its operating needs, liabilities and commitments over the next twelve months from the issuance of the accompanying consolidated financial statements.
See "Credit Facility" below for additional details.
Restricted Cash
As of March 31, 2025 and December 31, 2024, the Company’s balance sheet includes $
10
The Company's cash and cash equivalents and restricted cash, as presented in the Condensed Consolidated Statements of Cash Flows, was as follows (in thousands):
|
As of March 31, |
|
|||||
|
2025 |
|
|
2024 |
|
||
Cash and cash equivalents |
$ |
|
|
$ |
|
||
Cash and cash equivalents - discontinued operations |
|
- |
|
|
|
|
|
Restricted cash |
|
|
|
|
|
||
Total as presented in the Condensed Consolidated Statements of Cash Flows |
$ |
|
|
$ |
|
||
Related Party
Substantially all of the Company’s television stations are Univision- or UniMás-affiliated television stations. The network affiliation agreement with TelevisaUnivision provides certain of the Company’s owned stations the exclusive right to broadcast TelvisaUnivision’s primary Univision network and UniMás network programming in their respective markets. Under the network affiliation agreement, the Company retains the right to sell no less than per hour of the available advertising time on stations that broadcast Univision network programming, and the right to sell approximately per hour of the available advertising time on stations that broadcast UniMás network programming, subject to adjustment from time to time by TelevisaUnivision.
Under the network affiliation agreement, TelevisaUnivision acts as the Company’s exclusive third-party sales representative for the sale of certain national advertising on the Univision- and UniMás-affiliate television stations, and the Company pays certain sales representation fees to TelevisaUnivision relating to sales of all advertising for broadcast on its Univision- and UniMás-affiliate television stations.
During the three-month periods ended March 31, 2025 and 2024, the amount the Company paid TelevisaUnivision in this capacity was $
The Company also generates revenue under
On October 2, 2017, the Company entered into the current affiliation agreement which superseded and replaced its prior affiliation agreements with TelevisaUnivision. Additionally, on the same date, the Company entered into a proxy agreement and marketing and sales agreement with TelevisaUnivision, each of which superseded and replaced the prior comparable agreements with TelevisaUnivision. The term of each of these current agreements expires on December 31, 2026 for all of the Company’s Univision and UniMás network affiliate stations.
Under the Company’s current proxy agreement with TelevisaUnivision, the Company grants TelevisaUnivision the right to negotiate the terms of retransmission consent agreements for its Univision- and UniMás-affiliated television station signals. Among other things, the proxy agreement provides terms relating to compensation to be paid to the Company by TelevisaUnivision with respect to retransmission consent agreements entered into with multichannel video programming distributors (“MVPDs”). As of March 31, 2025, the amount due to the Company from TelevisaUnivision was $
Stock-Based Compensation
The Company measures all stock-based awards using a fair value method and recognizes the related stock-based compensation expense in the condensed consolidated financial statements over the requisite service period. As stock-based compensation expense recognized in the Company’s condensed consolidated financial statements is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures.
11
Restricted Stock Units
Stock-based compensation expense related to restricted stock units ("RSUs") is based on the fair value of the Company’s stock price on the date of grant and is amortized over the vesting period, generally between
During the three-month period ended March 31, 2025, the Company had the following non-vested RSUs activity (in thousands, except grant date fair value data):
|
|
Number of RSUs |
|
|
Weighted-Average Grant Date Fair Value |
|
||
Nonvested balance at December 31, 2024 |
|
|
|
|
$ |
|
||
Granted |
|
|
|
|
|
|
||
Vested |
|
|
- |
|
|
|
- |
|
Forfeited or cancelled |
|
|
( |
) |
|
|
|
|
Nonvested balance at March 31, 2025 |
|
|
|
|
|
|
||
Stock-based compensation expense related to RSUs was $
As of March 31, 2025, there was $
Performance Stock Units
In connection with the annual grant of performance stock units (“PSUs”) in January 2025, the Company has granted PSUs to certain senior employees, which PSUs are subject to both time-based vesting conditions and market-based conditions. Both the service and market conditions must be satisfied for the PSUs to vest. The PSUs consist of four equal tranches, based on achievement of a share price condition if the Company achieves share price targets of $
The Company recognizes compensation expense related to the PSUs using the accelerated attribution method over the requisite service period. Stock-based compensation expense for PSUs is based on a performance measurement of
Stock-based compensation expense related to PSUs was $
As of March 31, 2025, there was $
The grant date fair value for each PSU was estimated using a Monte-Carlo simulation model that incorporates option-pricing inputs covering the period from the grant date through the end of the performance period.
|
|
2025 PSUs |
|
|
Stock price at issuance |
|
$ |
|
|
Expected volatility |
|
|
% |
|
Risk-free interest rate |
|
|
% |
|
Expected term |
|
|
|
|
Expected dividend yield |
|
|
% |
|
During the three-month period ended March 31, 2025, the Company had the following non-vested PSUs activity (in thousands, except grant date fair value data):
12
|
|
Number of PSUs |
|
|
Weighted-Average Grant Date Fair Value |
|
||
Nonvested balance at December 31, 2024 |
|
|
|
|
$ |
|
||
Granted |
|
|
|
|
|
|
||
Vested |
|
|
- |
|
|
|
- |
|
Forfeited or cancelled |
|
|
- |
|
|
|
- |
|
Nonvested balance at March 31, 2025 |
|
|
|
|
|
|
||
Income (Loss) Per Share
The following table illustrates the reconciliation of the basic and diluted income (loss) per share (in thousands, except share and per share data):
|
|
Three-Month Period |
|
|||||
|
|
Ended March 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Numerator: |
|
|
|
|
|
|
||
Net income (loss) from continuing operations |
|
$ |
( |
) |
|
$ |
( |
) |
Net income (loss) from discontinued operations |
|
|
( |
) |
|
|
( |
) |
Net income (loss) attributable to common stockholders |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
|
|
|
|
|
||
Basic and diluted earnings per share: |
|
|
|
|
|
|
||
Denominator: |
|
|
|
|
|
|
||
Weighted average common shares outstanding |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Per share: |
|
|
|
|
|
|
||
Income (loss) per share from continuing operations |
|
$ |
( |
) |
|
$ |
( |
) |
Income (loss) per share from discontinued operations |
|
|
( |
) |
|
|
( |
) |
Net income (loss) per share attributable to common stockholders |
|
$ |
( |
) |
|
$ |
( |
) |
For the three-month period ended March 31, 2025, all dilutive securities have been excluded as their inclusion would have had an antidilutive effect on loss per share. The number of securities whose conversion would result in an incremental number of shares that would be included in determining the weighted average shares outstanding for diluted earnings per share if their effect was not antidilutive was
For the three-month period ended March 31, 2024, all dilutive securities have been excluded as their inclusion would have had an antidilutive effect on loss per share. The number of securities whose conversion would result in an incremental number of shares that would be included in determining the weighted average shares outstanding for diluted earnings per share if their effect was not antidilutive was
Impairment
The carrying values of the Company's reporting units are determined by allocating all applicable assets (including goodwill) and liabilities based upon the unit in which the assets are employed and to which the liabilities relate, considering the methodologies utilized to determine the fair value of the reporting units.
Goodwill and indefinite life intangibles are not amortized but are tested annually for impairment, or more frequently, if events or changes in circumstances indicate that the assets might be impaired. The annual testing date is October 1.
13
The Company also conducted a review of the fair value of the television and radio FCC licenses on the annual testing date of October 1, 2024. The estimated fair value of indefinite life intangible assets is determined by an income approach. The income approach estimates fair value based on the estimated future cash flows of each market cluster that a hypothetical buyer would expect to generate, discounted by an estimated weighted-average cost of capital that reflects current market conditions, which reflect the level of inherent risk. The income approach requires the Company to make a series of assumptions, such as discount rates, revenue projections, profit margin projections and terminal values multiples. The Company estimates the discount rates on a blended rate of return considering both debt and equity for comparable publicly-traded companies. These comparable publicly-traded companies have similar size, operating characteristics and/or financial profiles to the Company. The Company also estimated the terminal value multiple based on comparable publicly-traded companies. The Company estimated the revenue projections and profit margin projections based on various market clusters signal coverage of the markets and industry information for an average station within a given market. The information for each market cluster includes such things as estimated market share, estimated capital start-up costs, population, household income, retail sales and other expenditures that would influence advertising expenditures. Alternatively, some stations under evaluation have had limited relevant cash flow history due to planned or actual conversion of format or upgrade of station signal. The assumptions the Company makes about cash flows after conversion are based on the performance of similar stations in similar markets and potential proceeds from the sale of the assets.
As a result of this impairment analysis, taking into consideration the foregoing factors, for the year ended December 31, 2024, the Company recorded of FCC licenses within the media reportable segment in the amount of $
As further discussed in in the Company's 2024 10-K, following the communication from Meta on March 4, 2024, that it intended to wind down its ASP program globally and end its relationship with all of its ASPs, including the Company, by July 1, 2024, the Company updated its internal forecasts of future performance and determined that a triggering event had occurred during the first quarter of 2024 that required interim impairment tests within its then digital reporting unit. As a result, the Company recorded a goodwill impairment charge of $
In March 2025, the Company entered into an LOI to sell the assets of its
Loss on Lease Abandonment
At the time of a lease termination, the operating lease right-of-use asset is derecognized, while the corresponding lease liability is evaluated and derecognized by the Company based any remaining contractual obligations as of the lease termination date.
The Company's corporate headquarters and main operational offices for its audio operations were previously located in Santa Monica, California. The Company occupied approximately
Treasury Stock
On March 1, 2022, the Company's Board of Directors approved a share repurchase program of up to $
During the three-month periods ended March 31, 2025 and 2024, the Company did
Treasury stock is included as a deduction from equity in the Stockholders’ Equity section of the condensed consolidated balance sheets. Shares repurchased pursuant to the Company’s share repurchase program are retired during the same calendar year.
Credit Facility
14
On
On the 2023 Closing Date, the Company repaid in full all of the outstanding obligations under its previous credit agreement and accounted for this repayment as an extinguishment of debt in accordance with Accounting Standards Codification ("ASC") 470, "Debt".
As provided for in the 2023 Credit Agreement, the 2023 Credit Facility consists of (i) a $
Borrowings under the 2023 Credit Facility were used on the 2023 Closing Date (a) to repay in full all of the outstanding obligations of the Company and its subsidiaries under its previous credit facility, (b) to pay fees and expenses in connection the 2023 Credit Facility and (c) for general corporate purposes. The 2023 Credit Facility matures on
The 2023 Credit Facility is guaranteed on a senior secured basis by certain of the Company’s existing and future wholly-owned domestic subsidiaries, and secured on a first priority basis by the Company’s and those subsidiaries’ assets.
The Company’s borrowings under the 2023 Credit Facility bear interest on the outstanding principal amount thereof from the date when made at a rate per annum equal to either: (i) the Term SOFR (as defined in the 2023 Credit Agreement) plus a margin between
As of March 31, 2025, the interest rate on the Company's Term A Facility and the drawn portion of the Revolving Credit Facility was
The amounts outstanding under the 2023 Credit Facility may be prepaid at the option of the Company without premium or penalty, provided that certain limitations are observed, and subject to customary breakage fees in connection with the prepayment of a Term SOFR loan. The principal amount of the Term A Facility shall be paid in installments on the dates and in the respective amounts set forth in the 2023 Credit Agreement, with the final balance due on the Maturity Date.
In March 2024, the Company made a prepayment of $
In June 2024, the Company made an additional prepayment of $
In 2024, the Company recorded a loss on debt extinguishment of $
The Company incurred debt issuance costs of $
The covenants of the Credit Agreement include customary negative covenants that, among other things, restrict the Company’s ability to incur additional indebtedness, grant liens and make certain acquisitions, investments, asset dispositions and restricted payments. In addition, the 2023 Credit Facility requires compliance with financial covenants related to total net leverage ratio, not to exceed
The 2023 Credit Agreement includes customary events of default, as well as the following events of default, that are specific to the Company:
15
The 2023 Credit Agreement includes customary rights and remedies upon the occurrence of any event of default thereunder, including rights to accelerate the loans, terminate the commitments thereunder and realize upon the collateral securing the obligations under the 2023 Credit Agreement.
The security agreement that the Company entered into with respect to its previous credit facility remains in effect with respect to its 2023 Credit Facility.
The carrying amount of the Term Loan A Facility as of March 31, 2025 approximated its fair value and was $
Concentrations of Credit Risk and Trade Receivables
The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents and trade accounts receivable. From time to time, the Company has had, and may have, bank deposits in excess of Federal Deposit Insurance Corporation insurance limits. As of March 31, 2025, the majority of all U.S. deposits are maintained in two financial institutions. The Company has not experienced any losses in such accounts and believes that it is not currently exposed to significant credit risk on cash and cash equivalents. In addition, to the Company's knowledge, all or substantially all of the bank deposits held in banks outside the United States are not insured.
The Company’s credit risk is spread across a large number of customers located primarily in the United States and Europe, thereby spreading the trade receivable credit risk. The Company routinely assesses the financial strength of its customers and, as a consequence, believes that it is managing its trade receivable credit risk effectively. Trade receivables are carried at original invoice amount less an estimate made for doubtful receivables, based on a review of all outstanding amounts on a monthly basis. An allowance for doubtful accounts is provided for known and anticipated credit losses, as determined by management in the course of regularly evaluating individual customer receivables. This evaluation takes into consideration a customer’s financial condition and credit history, as well as current economic conditions. Trade receivables are written off when deemed uncollectible. Recoveries of trade receivables previously written off are recorded when received. No interest is charged on customer accounts.
Revenue from the largest advertiser represented
Allowance for Doubtful Accounts
The accounts receivable consist of a homogeneous pool of relatively small dollar amounts from a large number of customers. The Company evaluates the collectability of its trade accounts receivable based on a number of factors. When the Company is aware of a specific customer’s inability to meet its financial obligations to us, a specific reserve for bad debts is estimated and recorded which reduces the recognized receivable to the estimated amount the Company believes will ultimately be collected. In addition to specific customer identification of potential bad debts, bad debt charges are recorded based on the Company's recent past loss history and an overall assessment of past due trade accounts receivable amounts outstanding.
Estimated losses for bad debts are provided for in the consolidated financial statements through a charge that aggregated $
Fair Value Measurements
The Company measures certain financial assets and liabilities at fair value on a recurring basis. Fair value is the price the Company would receive to sell an asset or pay to transfer a liability in an orderly transaction with a market participant at the measurement date.
ASC 820, “Fair Value Measurements and Disclosures”, defines and establishes a framework for measuring fair value and expands disclosures about fair value measurements. In accordance with ASC 820, the Company has categorized its financial assets and liabilities, based on the priority of the inputs to the valuation technique, into a three-level fair value hierarchy as set forth below.
Level 1 – Assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market that the company has the ability to access at the measurement date.
16
Level 2 – Assets and liabilities whose values are based on quoted prices for similar attributes in active markets; quoted prices in markets where trading occurs infrequently; and inputs other than quoted prices that are observable, either directly or indirectly, for substantially the full term of the asset or liability.
Level 3 – Assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement.
If the inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.
The following table presents the Company’s financial assets and liabilities measured at fair value on a recurring and nonrecurring basis in the condensed consolidated balance sheets (in millions):
|
|
March 31, 2025 |
|
||||||||||||||||
|
|
Total Fair Value and Carrying Value on Balance Sheet |
|
|
Fair Value Measurement Category |
|
|
|
|
||||||||||
Recurring fair value measurements |
|
|
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total Gains (Losses) |
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Money market account |
|
$ |
|
|
$ |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Corporate bonds and notes |
|
$ |
|
|
|
— |
|
|
$ |
|
|
|
— |
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonrecurring fair value measurements: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets held for sale |
|
$ |
|
|
$ |
|
|
|
— |
|
|
|
— |
|
$ |
( |
) |
||
|
|
December 31, 2024 |
|
||||||||||||||||
|
|
Total Fair Value and Carrying Value on Balance Sheet |
|
|
Fair Value Measurement Category |
|
|
|
|
||||||||||
Recurring fair value measurements |
|
|
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total Gains (Losses) |
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate bonds and notes |
|
$ |
|
|
|
— |
|
|
$ |
|
|
|
— |
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonrecurring fair value measurements: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FCC licenses |
|
$ |
|
|
|
— |
|
|
|
— |
|
|
$ |
|
$ |
( |
) |
||
The Company’s money market account is comprised of cash and cash equivalents, which are recorded at their fair market value within Cash and cash equivalents in the Condensed Consolidated Balance Sheets.
The Company’s available for sale debt securities are comprised of corporate bonds and notes, asset-backed securities, and U.S. Government securities. The majority of the carrying value of these securities held by the Company are investment grade. These securities are valued using quoted prices for similar attributes in active markets (Level 2). Since these investments are classified as available for sale, they are recorded at their fair market value within Marketable securities in the Consolidated Balance Sheets and their unrealized gains or losses are included in other comprehensive income. Realized gains and losses from the sale of available for sale securities are included in the Consolidated Statements of Operations and were determined on a specific identification basis.
As of March 31, 2025, the following table summarizes the amortized cost and the unrealized gains (losses) of the available for sale securities (in thousands):
|
|
|
|
|||||
|
|
Corporate Bonds and Notes |
|
|||||
|
|
Amortized Cost |
|
|
Unrealized gains (losses) |
|
||
Due within a year |
|
$ |
|
|
$ |
( |
) |
|
Due after one year |
|
|
|
|
|
( |
) |
|
Total |
|
$ |
|
|
$ |
( |
) |
|
17
The Company’s available for sale debt securities are considered for credit losses under the guidance of Accounting Standards Update (“ASU”) 2016-13, Financial Instruments—Credit Losses (Topic 326). As of March 31, 2025 and December 31, 2024, the Company determined that a credit loss allowance is not required.
Included in interest income for the three-month periods ended March 31, 2025 and 2024 was interest income related to the Company’s available for sale securities of $
Accumulated Other Comprehensive Income (Loss)
Accumulated other comprehensive income (loss) includes foreign currency translation adjustments and changes in the fair value of available for sale securities.
The following table provides a roll-forward of accumulated other comprehensive income (loss) (in thousands):
|
|
Foreign |
|
|
Marketable |
|
|
Total |
|
|||
Accumulated other comprehensive income (loss) as of December 31, 2024 |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
Other comprehensive income (loss) |
|
|
- |
|
|
|
|
|
|
|
||
Income tax (expense) benefit |
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
Amounts reclassified from AOCI |
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
Accumulated other comprehensive income (loss) as of March 31, 2025 |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Foreign Currency
The Company’s reporting currency is the U.S. dollar. All transactions initiated in foreign currencies, primarily the Euro, are translated into U.S. dollars in accordance with ASC 830, “Foreign Currency Matters” and the related rate fluctuation on transactions is included in the Condensed Consolidated Statements of Operations.
For foreign operations with the local currency as the functional currency, assets and liabilities are translated from the respective local currencies into U.S. dollars at the exchange rate prevailing at the balance sheet date, and equity and long-term assets are translated at historical rates. Revenues and expenses are translated at the average exchange rate for the period. Translation adjustments resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining comprehensive (income) loss.
Cost of Revenue
Cost of revenue consists of the costs of online media acquired from third-parties.
Recent Accounting Pronouncements
There were no new accounting pronouncements that were issued or became effective since the issuance of the Company's 2024 10-K that had, or are expected to have, a material impact on the Company’s condensed consolidated financial statements.
Newly Adopted Accounting Standards
There were no new accounting standards that were adopted since the issuance of the Company's 2024 10-K.
3. REVENUES
Revenue Recognition
Revenues are recognized when control of the promised services is transferred to the Company’s customers, in an amount equal to the consideration the Company expects to be entitled to in exchange for those services.
Broadcast Advertising. Revenue related to the sale of advertising on the Company's television and radio stations is recognized at the time of broadcast. Revenue for contracts with advertising agencies is recorded at an amount that is net of the commission retained by the agency. Revenue from contracts directly with the advertisers is recorded as gross revenue and the related commission or national representation fee is recorded in operating expense.
Digital Advertising. Revenue related to digital advertising, in both our media and advertising technology and services segments, is recognized when display or other digital advertisements record impressions on the websites and mobile and Internet-connected television apps of media companies on whose digital platforms the advertisements are placed or as the advertiser’s previously agreed-upon performance criteria are satisfied. The Company has concluded that it is the principal in the transaction and therefore recognizes revenue on a gross basis, because (i) the Company is responsible for fulfillment of the contract, including customer support, resolving customer complaints, and accepting responsibility for the quality or suitability of the product or service; (ii) the Company has pricing
18
discretion over the transaction; and (iii) the Company carries inventory risk for all inventory purchased regardless of whether the Company is able to collect on a transaction.
Retransmission Consent. The Company generates revenue from retransmission consent agreements that are entered into with multichannel video programming distributors ("MVPDs"). The Company grants the MVPDs access to its television station signals so that they may rebroadcast the signals and charge their subscribers for this programming. Revenue is recognized as the television signal is delivered to the MVPD.
Spectrum Usage Rights. The Company generates revenue from agreements associated with its television stations’ spectrum usage rights. Revenue is recognized in accordance with the contractual fees over the term of the agreement or when the Company has relinquished all or a portion of its spectrum usage rights for a station or have relinquished its rights to operate a station on the existing channel free from interference.
The Company does not disclose the value of unsatisfied performance obligations when (i) contracts have an original expected length of one year or less, which applies to essentially all of the Company's advertising contracts, and (ii) variable consideration is a sales-based or usage-based royalty promised in exchange for a license of intellectual property, which applies to retransmission consent revenue.
The Company expenses contract acquisition costs, such as sales commissions generated either by internal direct sales employees or through third party advertising agency intermediaries, when incurred because the amortization period is one year or less. These costs are recorded within direct operating expenses.
The Company records deferred revenues within Accounts payable and accrued expenses in the Consolidated Balance Sheets, when cash payments are received or due in advance of its performance, including amounts which are refundable. The change in the deferred revenue balance is primarily driven by cash payments received or due in advance of satisfying the Company’s performance obligations, offset by revenues recognized that were included in the deferred revenue balance in the prior period.
The Company’s payment terms vary by the type and location of customer and the products or services offered. The term between invoicing and when payment is due is typically 30 days. For certain individual customers and customer types, the Company generally requires payment before the services are delivered to the customer.
Disaggregated Revenue
The following table presents our revenues disaggregated by major source (in thousands):
|
|
Three-Month Period |
|
|||||
|
|
Ended March 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Digital advertising |
|
$ |
|
|
$ |
|
||
Broadcast advertising |
|
|
|
|
|
|
||
Spectrum usage rights |
|
|
|
|
|
|
||
Retransmission consent |
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
Total revenue |
|
$ |
|
|
$ |
|
||
Contracts are entered into directly with customers or through an advertising agency that represents the customer. Sales of advertising to customers or agencies within a station’s designated market area (“DMA”) are referred to as local revenue, whereas sales from outside the DMA are referred to as national revenue.
|
|
Three-Month Period |
|
|||||
|
|
Ended March 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Local direct |
|
$ |
|
|
$ |
|
||
Local agency |
|
|
|
|
|
|
||
National agency |
|
|
|
|
|
|
||
Total revenue |
|
$ |
|
|
$ |
|
||
19
The following table further disaggregates the Company’s revenue by geographical region, based on the location of the sales office (in thousands):
|
|
Three-Month Period |
|
|||||
|
|
Ended March 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
United States |
|
$ |
|
|
$ |
|
||
Rest of the World (1) |
|
|
|
|
|
|
||
Total revenue |
|
$ |
|
|
$ |
|
||
Deferred Revenue
(in thousands) |
December 31, 2024 |
|
Increase |
|
Decrease |
|
|
March 31, 2025 |
|
||
Deferred revenue |
$ |
|
|
( |
|
|
$ |
|
|||
4. LEASES
The Company’s leases are considered operating leases and primarily consist of real estate such as office space, broadcasting towers, land and land easements. The operating leases are reflected within the consolidated balance sheet as Operating leases right of use asset with the related liability presented as Operating lease liabilities and Long-term operating lease liabilities. Lease expense is recognized on a straight-line basis over the lease term. Generally, lease terms include options to renew or extend the lease. Unless the renewal option is considered reasonably certain, the exercise of any such options has been excluded from the calculation of lease liabilities.
The following table summarizes the expected future payments related to lease liabilities as of March 31, 2025:
(in thousands) |
|
|
|
|
Remainder of 2025 |
|
$ |
|
|
2026 |
|
|
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
Thereafter |
|
|
|
|
Total minimum payments |
|
$ |
|
|
Less amounts representing interest |
|
|
( |
) |
Present value of minimum lease payments |
|
|
|
|
Less current operating lease liabilities |
|
|
( |
) |
Long-term operating lease liabilities |
|
$ |
|
|
The Company’s corporate headquarters and main operational offices for its audio operations are currently located in Burbank, California. The Company's corporate headquarters and main operational offices for its audio operations were previously located in Santa Monica, California. The Company occupied approximately
The following table summarizes lease payments and supplemental non-cash disclosures:
|
|
Three-Month Period Ended March 31, |
|||||
(in thousands) |
|
2025 |
|
|
2024 |
||
Cash paid for amounts included in lease liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating cash flows from operating leases |
|
$ |
|
|
$ |
||
Non-cash additions to operating lease assets |
|
$ |
- |
|
|
$ |
|
20
The following table summarizes the components of lease expense:
|
|
Three-Month Period |
|
|||||
|
|
Ended March 31, |
|
|||||
(in thousands) |
|
2025 |
|
|
2024 |
|
||
Operating lease cost |
|
$ |
|
|
$ |
|
||
Variable lease cost |
|
|
|
|
|
|
||
Short-term lease cost |
|
|
|
|
|
|
||
Total lease cost |
|
$ |
|
|
$ |
|
||
For the three-month period ended March 31, 2025, lease cost of $
5. SEGMENT INFORMATION
In the Company's former EGP business, it acted as an intermediary between primarily global media companies and advertisers, which consisted of either the enterprise or its ad agency running the advertisement. The Company's customers were both these primarily global media companies and advertisers. On March 4, 2024, the Company received a communication from Meta that it intended to wind down its ASP program globally and end its relationship with all of its ASPs, including the Company's, by July 1, 2024. As a result of this communication from Meta, the Company's , who is also the Chief Operating Decision Maker (the “CODM”), led a thorough review of the Company's operations, cost structure, digital strategy and organization of its business. This review led to the decision to sell the enterprises comprising the Company's EGP business -- the largest business unit of what was then the Company’s digital segment. Following this decision, during the second quarter of 2024, the Company entered into a definitive agreement to sell substantially all of its EGP business to IMS. The transaction was completed on June 28, 2024. The remaining parts of the Company's EGP business, Jack of Digital and Adsmurai, were each sold back to their respective founders in separate transactions during the second quarter of 2024.
Prior to the sale of the EGP business, for financial reporting purposes the Company reported in three segments – digital, television and audio, based on the type of medium in which it sold advertising. The sale of the EGP business has allowed the Company to focus its operations on the products and services it sells instead of the type of advertising medium in which it sells them, which had been the Company's historic operational approach.
The Company's media segment consists of sales of advertising through various media, including television, radio and digital. The Company owns and/or operates
The Company's advertising technology & services segment consists of programmatic ad services through Smadex, its demand side programmatic ad platform, and Adwake, its mobile growth solutions business.
Segment operating profit (loss) is defined as operating profit (loss) before corporate expenses, change in fair value of contingent consideration, impairment charge, other operating (gain) loss, and foreign currency (gain) loss. The Company generated
The accounting policies applied to determine the segment information are generally the same as those described in the summary of significant accounting policies (see Note 2). The Company evaluates the performance of its operating segments based on separate financial data for each operating segment as provided below (in thousands):
21
|
|
Three-Month Period |
|
|
|
|
||||||
|
|
Ended March 31, |
|
|
% |
|
||||||
|
|
2025 |
|
|
2024 |
|
|
Change |
|
|||
Net revenue |
|
|
|
|
|
|
|
|
|
|||
Media |
|
$ |
|
|
$ |
|
|
|
( |
)% |
||
Advertising Technology & Services |
|
|
|
|
|
|
|
|
% |
|||
Consolidated |
|
|
|
|
|
|
|
|
% |
|||
|
|
|
|
|
|
|
|
|
|
|||
Cost of revenue |
|
|
|
|
|
|
|
|
|
|||
Media |
|
|
|
|
|
|
|
|
% |
|||
Advertising Technology & Services |
|
|
|
|
|
|
|
|
% |
|||
Consolidated |
|
|
|
|
|
|
|
|
% |
|||
|
|
|
|
|
|
|
|
|
|
|||
Direct operating expenses |
|
|
|
|
|
|
|
|
|
|||
Media |
|
|
|
|
|
|
|
|
( |
)% |
||
Advertising Technology & Services |
|
|
|
|
|
|
|
|
% |
|||
Consolidated |
|
|
|
|
|
|
|
|
% |
|||
|
|
|
|
|
|
|
|
|
|
|||
Selling, general and administrative expenses |
|
|
|
|
|
|
|
|
|
|||
Media |
|
|
|
|
|
|
|
|
% |
|||
Advertising Technology & Services |
|
|
|
|
|
|
|
|
% |
|||
Consolidated |
|
|
|
|
|
|
|
|
% |
|||
|
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|||
Media |
|
|
|
|
|
|
|
|
( |
)% |
||
Advertising Technology & Services |
|
|
|
|
|
|
|
|
( |
)% |
||
Consolidated |
|
|
|
|
|
|
|
|
( |
)% |
||
|
|
|
|
|
|
|
|
|
|
|||
Segment operating profit (loss) |
|
|
|
|
|
|
|
|
|
|||
Media |
|
|
( |
) |
|
|
|
|
* |
|
||
Advertising Technology & Services |
|
|
|
|
|
|
|
|
% |
|||
Consolidated |
|
|
|
|
|
|
|
|
( |
)% |
||
|
|
|
|
|
|
|
|
|
|
|||
Corporate expenses |
|
|
|
|
|
|
|
|
( |
)% |
||
Change in fair value of contingent consideration |
|
|
- |
|
|
|
( |
) |
|
|
( |
)% |
Impairment charge |
|
|
|
|
|
- |
|
|
* |
|
||
Loss on lease abandonment |
|
|
|
|
|
- |
|
|
* |
|
||
Foreign currency (gain) loss |
|
|
|
|
|
|
|
|
( |
)% |
||
Operating income (loss) |
|
|
( |
) |
|
|
( |
) |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|||
Interest expense |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
( |
)% |
Interest income |
|
|
|
|
|
|
|
|
% |
|||
Dividend income |
|
|
- |
|
|
|
|
|
|
( |
)% |
|
Realized gain (loss) on marketable securities |
|
|
|
|
|
( |
) |
|
* |
|
||
Gain (loss) on debt extinguishment |
|
|
- |
|
|
|
( |
) |
|
|
( |
)% |
Income (loss) before income taxes |
|
|
( |
) |
|
|
( |
) |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|||
Capital expenditures |
|
|
|
|
|
|
|
|
|
|||
Media |
|
$ |
|
|
$ |
|
|
|
|
|||
Advertising Technology & Services |
|
|
|
|
|
|
|
|
|
|||
Consolidated |
|
$ |
|
|
$ |
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
* Percentage not meaningful.
6. COMMITMENTS AND CONTINGENCIES
22
7. DISCONTINUED OPERATIONS
As discussed in Note 2, as a result of the communication from Meta on March 4, 2024, that it intended to wind down its ASP program globally and end its relationship with all of its ASPs, including the Company, by July 1, 2024, the Company conducted a thorough review of its digital strategy, operations and cost structure, and during the second quarter of 2024 made the decision to dispose of the operations of its EGP business, the Company's digital commercial partnerships business, which took place in the following three transactions:
Sale to IMS
On June 13, 2024, the Company entered into an agreement to sell
The transaction closed on June 28, 2024. Cash proceeds from the transaction received by the Company at the closing were $
The Company recorded a loss of $
Sale of Adsmurai
On August 5, 2022, the Company made a loan (the "Adsmurai Loan") in the principal amount of €
On
In connection with the Adsmurai Acquisition, on April 3, 2023 the Company made a loan to entities affiliated with owners of the remaining 49% interest in Adsmurai in the principal amount of €
On May 6, 2024 (the "Effective Date"), the Company entered into a Share Purchase Agreement (the “Adsmurai Purchase Agreement”), among Adsmurai, the Company and the other stockholders of Adsmurai (the “Adsmurai Buyers”). Pursuant to the Adsmurai Purchase Agreement, on such date (i) the Company sold its
The Total Consideration is payable to the Company as follows:
The Company recorded a loss of $
Sale of Jack of Digital
On August 3, 2022, the Company acquired
On April 3, 2023, the Company acquired the remaining issued and outstanding stock of Jack of Digital for $
23
On June 28, 2024, the Company sold
The Company recorded a loss of $
The Company concluded that the assets of the EGP business met the criteria for classification as held for sale. Additionally, the Company determined that the disposal, which was initiated and completed during the second quarter of 2024, represented a strategic shift that had a major effect on the Company's operations and financial results. As such, the results of the Company's former EGP business are presented as discontinued operations in the Consolidated Statements of Operations for all periods presented. Prior periods have been adjusted to conform to the current presentation. There were no remaining assets and liabilities of discontinued operations in the Consolidated Balance Sheets as of December 31, 2024 and March 31, 2025.
The following table summarizes the results of discontinued operations, net of tax (in thousands):
|
|
Three-Month Period |
|
|||||
|
|
Ended March 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Net Revenue |
|
$ |
|
|
$ |
|
||
Expenses: |
|
|
|
|
|
|
||
Cost of revenue |
|
|
|
|
|
|
||
Direct operating expenses |
|
|
|
|
|
|
||
Selling, general and administrative expenses |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
|
|
|
|
||
Change in fair value of contingent consideration |
|
|
|
|
|
( |
) |
|
Impairment charge |
|
|
|
|
|
|
||
Foreign currency (gain) loss |
|
|
|
|
|
|
||
Operating income (loss) |
|
|
( |
) |
|
|
( |
) |
Interest expense |
|
|
|
|
|
( |
) |
|
Interest income |
|
|
|
|
|
|
||
Income (loss) from discontinued operations before income taxes |
|
|
( |
) |
|
|
( |
) |
Income tax benefit (expense) |
|
|
|
|
|
|
||
Net income (loss) from discontinued operations before noncontrolling interests in discontinued operations |
|
|
( |
) |
|
|
( |
) |
Net (income) loss attributable to redeemable noncontrolling interest |
|
|
|
|
|
|
||
Net income (loss) from discontinued operations, net of tax |
|
$ |
( |
) |
|
$ |
( |
) |
Allocated general corporate overhead costs do not meet the criteria to be presented within net loss from discontinued operations, net of tax, and were excluded from all figures presented in the table above.
The Company and IMS entered into a transition services agreement pursuant to which the Company and IMS provided certain services to each other through December 2024. The Company did not collect or pay any cash related to these activities.
For the three-months period ended March 31, 2024, there was a tax benefit in discontinued operations as a result of the (i) tax effect of a pre-tax loss, (ii) changes in the fair value of contingent consideration liability, and (iii) non-taxable non-territorial income.
As a result of the EGP disposition during the second quarter of 2024, the Company was required to repay $
The goodwill was allocated between the discontinued operations and the continuing operations based on the relative fair value of the components representing a business. Goodwill is not allocated to a portion of a reporting unit that does not meet the definition of a business.
24
The following table presents significant non-cash items and capital expenditures of discontinued operations for the periods presented:
|
Three-Month Period |
|
|||||
|
Ended March 31, |
|
|||||
|
2025 |
|
|
2024 |
|
||
Depreciation and amortization |
$ |
|
|
$ |
|
||
Impairment charge |
$ |
|
|
$ |
|
||
Change in fair value of contingent consideration |
$ |
|
|
$ |
( |
) |
|
Non-cash stock-based compensation |
$ |
|
|
$ |
|
||
Purchases of property and equipment |
$ |
|
|
$ |
|
||
8. SUBSEQUENT EVENTS
As discussed elsewhere in this report, in February 2025 the Company's management decided to vacate its previous corporate headquarters in Santa Monica, California and cease making further payments under the lease, as amended, therefor, which lease was scheduled to expire .
On April 18, 2025, the landlord notified the Company that the landlord was terminating the lease pursuant to its terms.
The Company and the landlord have begun discussions regarding this matter. The Company is currently unable to estimate the actual costs and other expenses or charges that may be incurred by the Company as a result of the termination.
25
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
Entravision owns and operates one of the largest groups of Spanish language television and radio stations in the United States. Our mission is to serve our Latino audience as a trusted provider of useful news, information and entertainment and to serve our advertisers by providing multi-channel marketing capabilities to engage our audience.
Entravision also owns and operates a smaller group of television stations that broadcast English language programming and has operations that provide programmatic advertising technology and services. We have organized our operations into two reportable segments. Our media segment includes our television, radio and digital marketing operations. Our advertising and technology services segment provides programmatic advertising and technology services through Smadex, our demand-side programmatic advertising purchasing platform, and Adwake, our performance-based media advertising agency.
In 2024, we discontinued and divested a significant portion of our operations, which consisted primarily of several acquisitions that had been completed prior to 2024, and which operations comprised the majority of our former digital segment.
Our net revenue for the three-months period ended March 31, 2025 was $91.9 million. Of this amount, revenue generated by our media segment accounted for approximately 45%, and revenue generated by our advertising technology & services segment accounted for approximately 55% of total revenue.
Highlights
During the first quarter of 2025, our revenue grew by double digits in the first quarter of 2025 compared to the comparable period of 2024, driven primarily by growth of our advertising technology & services segment, partially offset by a decrease in revenue in our media segment. In addition, during the first quarter of 2025 we:
Relationship with TelevisaUnivision
Our network affiliation agreement with TelevisaUnivision provides certain of our owned stations the exclusive right to broadcast TelevisaUnivision’s primary Univision network and UniMás network programming in their respective markets. We also generate revenue under a marketing and sales agreement with TelevisaUnivision, which gives us the right to manage the marketing and sales operations of TelevisaUnivision-owned Univision affiliates in three markets – Albuquerque, Boston and Denver. Under our proxy agreement with TelevisaUnivision, we grant TelevisaUnivision the right to negotiate the terms of retransmission consent agreements with multichannel video programming distributors, or MVPDs, for our Univision- and UniMás-affiliated television station signals. Revenue generated from retransmission consent agreements represents payments from MVPDs for access to our television station signals so that they may rebroadcast our signals and charge their subscribers for this programming. The term of each of these current agreements expires on December 31, 2026 for all of our Univision and UniMás network affiliate stations. TelevisaUnivision also owns approximately 10% of our common stock on a fully-converted basis. For more information regarding these agreements and the stock that TelevisaUnivision owns, see Note 2 to Notes to Condensed Consolidated Financial Statements.
Critical Accounting Policies
For a description of our critical accounting policies, please refer to “Application of Critical Accounting Policies and Accounting Estimates” in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our 2024 10-K.
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Recent Accounting Pronouncements
For further information on recently issued accounting pronouncements, see Note 2 to Notes to Condensed Consolidated Financial Statements.
Three-Month Periods Ended March 31, 2025 and 2024
The following table sets forth selected data from our operating results for the three-month periods ended March 31, 2025 and 2024 (in thousands):
|
|
Three-Month Period |
|
|
|
|
||||||
|
|
Ended March 31, |
|
|
% |
|
||||||
|
|
2025 |
|
|
2024 |
|
|
Change |
|
|||
Statements of Operations Data: |
|
|
|
|
|
|
|
|
|
|||
Net Revenue |
|
$ |
91,851 |
|
|
$ |
78,176 |
|
|
|
17 |
% |
|
|
|
|
|
|
|
|
|
|
|||
Cost of revenue |
|
|
33,472 |
|
|
|
22,658 |
|
|
|
48 |
% |
Direct operating expenses |
|
|
35,502 |
|
|
|
31,801 |
|
|
|
12 |
% |
Selling, general and administrative expenses |
|
|
15,506 |
|
|
|
14,334 |
|
|
|
8 |
% |
Corporate expenses |
|
|
7,788 |
|
|
|
12,248 |
|
|
|
(36 |
)% |
Depreciation and amortization |
|
|
3,477 |
|
|
|
4,739 |
|
|
|
(27 |
)% |
Change in fair value of contingent consideration |
|
|
- |
|
|
|
(220 |
) |
|
|
(100 |
)% |
Impairment charge |
|
|
23,673 |
|
|
|
- |
|
|
* |
|
|
Loss on lease abandonment |
|
|
25,191 |
|
|
|
- |
|
|
* |
|
|
Foreign currency (gain) loss |
|
|
12 |
|
|
|
265 |
|
|
|
(95 |
)% |
|
|
|
144,621 |
|
|
|
85,825 |
|
|
|
69 |
% |
Operating income (loss) |
|
|
(52,770 |
) |
|
|
(7,649 |
) |
|
|
590 |
% |
Interest expense |
|
|
(3,663 |
) |
|
|
(4,443 |
) |
|
|
(18 |
)% |
Interest income |
|
|
605 |
|
|
|
578 |
|
|
|
5 |
% |
Dividend income |
|
|
- |
|
|
|
10 |
|
|
|
(100 |
)% |
Realized gain (loss) on marketable securities |
|
|
1 |
|
|
|
(113 |
) |
|
* |
|
|
Loss on debt extinguishment |
|
|
- |
|
|
|
(40 |
) |
|
|
(100 |
)% |
Income before income (loss) taxes |
|
|
(55,827 |
) |
|
|
(11,657 |
) |
|
|
379 |
% |
Income tax benefit (expense) |
|
|
8,052 |
|
|
|
4,147 |
|
|
|
94 |
% |
Net income (loss) from continuing operations |
|
|
(47,775 |
) |
|
|
(7,510 |
) |
|
|
536 |
% |
Net income (loss) from discontinued operations, net of tax |
|
|
(191 |
) |
|
|
(41,380 |
) |
|
|
(100 |
)% |
Net income (loss) attributable to common stockholders |
|
$ |
(47,966 |
) |
|
$ |
(48,890 |
) |
|
|
(2 |
)% |
|
|
|
|
|
|
|
|
|
|
|||
Other Data: |
|
|
|
|
|
|
|
|
|
|||
Capital expenditures |
|
$ |
2,384 |
|
|
$ |
2,070 |
|
|
|
|
|
Net cash provided by (used in) operating activities |
|
|
(15,244 |
) |
|
|
33,375 |
|
|
|
|
|
Net cash provided by (used in) investing activities |
|
|
(2,475 |
) |
|
|
6,099 |
|
|
|
|
|
Net cash provided by (used in) financing activities |
|
|
(4,582 |
) |
|
|
(16,797 |
) |
|
|
|
|
Consolidated Operations
Net Revenue. Net revenue increased to $91.9 million for the three-month period ended March 31, 2025 from $78.2 million for the three-month period ended March 31, 2024. This increase was primarily due to an increase of $18.5 million in net revenue from our advertising technology & services segment, partially offset by a decrease of $4.8 million in net revenue from our media segment.
Cost of revenue. Cost of revenue increased to $33.5 million for the three-month period ended March 31, 2025 from $22.7 million for the three-month period ended March 31, 2024. This increase was primarily due to an increase of $0.4 million in cost of revenue from our media segment, and an increase of $10.4 million in cost of revenue from our advertising technology & services segment.
Effective July 1, 2024, with the realignment of our operations and reassignment of certain responsibilities, certain costs that were previously included as corporate expenses, primarily salaries, are now included in direct operating expenses and in selling, general and administrative expenses.
Direct Operating Expenses. Direct operating expenses increased to $35.5 million for the three-month period ended March 31, 2025 from $31.8 million for the three-month period ended March 31, 2024. This increase was primarily due to an increase of $3.8
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million in direct operating expenses in our advertising technology & services segment, partially offset by a decrease of $0.1 million in direct operating expenses in our media segment.
Selling, General and Administrative Expenses. Selling, general and administrative expenses increased to $15.5 million for the three-month period ended March 31, 2025, from $14.3 million for the three-month period ended March 31, 2024. This increase was primarily due to an increase of $0.8 million in selling, general and administrative expenses in our media segment, and an increase of $0.3 million in selling, general and administrative expenses in our advertising technology & services segment.
Corporate Expenses. Corporate expenses decreased to $7.8 million for the three-month period ended March 31, 2025 from $12.2 million for the three-month period ended March 31, 2024. This decrease was primarily due to a decrease of $0.9 million in salaries and bonus expense, including a reduction in the base salary and cash bonus components of our three most senior executives' compensation, a decrease of $2.1 million in non-cash stock-based compensation, a decrease of $0.6 million in audit fees, and a decrease of $0.8 million in corporate expenses due to the realignment of our operations as noted above.
Depreciation and amortization decreased to $3.5 million for the three-month period ended March 31, 2025 compared to $4.7 million for the three-month period ended March 31, 2024, primarily due to fully amortized intangible assets.
Change in fair value of contingent consideration. As a result of the change in fair value of the contingent consideration, primarily related to earnouts of certain past acquisitions, we recognized income of $0.2 million for the three-month period ended March 31, 2024.
Impairment. For the three-month period ended March 31, 2025, we incurred an impairment charge of $23.7 million related to broadcast licenses and fixed assets of the two television stations in Mexico that are held for sale (see Note 2 to Notes to Condensed Consolidated Financial Statements).
Loss on lease abandonment. For the three-month period ended March 31, 2025, we incurred a loss on lease abandonment of $25.2 million related to our previous Santa Monica lease (see Note 2 to Notes to Condensed Consolidated Financial Statements).
Foreign currency (gain) loss. We had a de minimis foreign currency loss for the three-month period ended March 31, 2025 compared to a foreign currency loss of $0.3 million for the three-month period ended March 31, 2024. Foreign currency gains and losses are primarily due to currency fluctuations that affect our operations located outside the United States.
Interest Expense, net. Interest expense, net decreased to $3.1 million for the three-month period ended March 31, 2025 from $3.9 million for three-month period ended March 31, 2024. This decrease was primarily due to lower interest rate on our debt and a lower principal balance due to prepayments totaling $20 million, which were made in the first half of 2024.
Gain (loss) on debt extinguishment. We recorded a de minimis loss on debt extinguishment for the three-month period ended March 31, 2024 due to prepayment of $10.0 million of our 2023 Credit Facility.
Realized gain (loss) on marketable securities. For the three-month period ended March 31, 2025 we recorded a de minimis realized gain, related to our available for sale securities. For the three-month period ended March 31, 2024 we recorded $0.1 million of realized loss, related to our available for sale securities.
Income Tax Expense or Benefit. Income tax benefit for the three-month period ended March 31, 2025 was $8.1 million, or 14% of our pre-tax loss. The effective tax rate for the three-month period ended March 31, 2025 was different from our statutory rate due to foreign and state taxes, changes in valuation allowances on deferred tax assets, non deductible executive compensation, share-based compensation from foreign employees, and transaction costs. Income tax benefit for the three-month period ended March 31, 2024 was $4.1 million, or 36% of our pre-tax loss. The effective tax rate for the three-month period ended March 31, 2024 was different from our statutory rate due to non deductible executive compensation, changes in the fair value of the contingent consideration liability, goodwill impairment, and non-taxable non-territorial income.
Our management periodically evaluates the realizability of the deferred tax assets and, if it is determined that it is more likely than not that the deferred tax assets are, or are not, realizable, adjusts the valuation allowance accordingly. Valuation allowances are established and maintained for deferred tax assets on a “more likely than not” threshold. The process of evaluating the need to maintain a valuation allowance for deferred tax assets and the amount maintained in any such allowance is highly subjective and is based on many factors, several of which are subject to significant judgment calls.
Based on our analysis, we determined that it was more likely than not that our deferred tax assets would be realized for all jurisdictions with the exception of certain of our digital operations, certain U.S. Foreign Tax Credit carryovers and certain states deferred tax assets. As a result of historical losses from our digital operations primarily in Uruguay, Mexico and Argentina, certain U.S. Foreign Tax Credit carryovers, and capital loss, management has determined that it is more likely than not that deferred tax assets of $18.0 million at March 31, 2025 will not be realized and therefore we have established a valuation allowance in that amount on those assets.
The Organization for Economic Co-operation and Development (“OECD”) Pillar 2 guidelines address the increasing digitalization of the global economy, re-allocating taxing rights among countries. The OECD, many other member states and various other governments have adopted, or are in the process of adopting, Pillar 2 which calls for a global minimum tax of 15% to be effective for tax years beginning in 2024. The OECD guidelines published to date include transition and safe harbor rules around the
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implementation of the Pillar 2, global minimum tax. We are monitoring developments and evaluating the impacts these new rules will have on our tax rate, including eligibility to qualify for these safe harbor rules.
As of March 31, 2025 and December 31, 2024, we had unrecognized tax benefits of $18.0 million and $17.3 million. We will recognize accrued interest and penalties related to unrecognized tax benefits in income tax expense.
Segment Operations
In our former EGP business, we acted as an intermediary between primarily global media companies and advertisers, which consisted of either the enterprise or its ad agency running the advertisement. Our customers were both these primarily global media companies and advertisers. On March 4, 2024, we received a communication from Meta that it intended to wind down its ASP program globally and end its relationship with all of its ASPs, including us, by July 1, 2024. As a result of this communication from Meta, our CEO, who is also our CODM, led a thorough review of our operations, cost structure, digital strategy and organization of our business. This review led to the decision to sell the enterprises comprising our EGP business -- the largest business unit of what was then our digital segment. Following this decision, during the second quarter of 2024, we entered into a definitive agreement to sell substantially all of our EGP business to IMS. The transaction was completed on June 28, 2024. The remaining parts of our EGP business, Jack of Digital and Adsmurai, were each sold back to their respective founders in separate transactions during the second quarter of 2024.
Prior to the sale of the EGP business, for financial reporting purposes we reported in three segments – digital, television and audio, based on the type of medium in which we sold advertising. The sale of the EGP business has allowed us to focus our operations on the products and services we sell instead of the type of advertising medium in which we sell them, which had been our historic operational approach. As a result of the sale of our EGP business, effective July 1, 2024, we have realigned our operating segments into two segments – media and advertising technology & services – consistent with our current operational and management structure, as well as the basis that is now used for internal management reporting and how our CEO evaluates our business. Our reportable segments are the same as our operating segments. Prior periods have been recast to conform to this presentation.
Our media segment consists of sales of advertising through various media, including television, radio and digital. We own and/or operate 49 primary television stations and 44 radio stations (37 FM and 7 AM), reaching and engaging Latinos in the United States. Our television operations comprise the largest affiliate group of both the top-ranked Univision television network and TelevisaUnivision’s UniMás network, with TelevisaUnivision-affiliated stations in 15 of the nation’s top 50 U.S. Latino markets. We own and operate one of the largest groups of primarily Spanish-language radio stations in the United States. We provide digital marketing operations in all of the U.S. markets where we have broadcast operations.
Our advertising technology & services segment consists of programmatic ad services through Smadex, our demand side programmatic ad platform, and Adwake, our mobile growth solutions business.
Media
Net Revenue. Net revenue in our media segment decreased to $41.0 million for the three-month period ended March 31, 2025 from $45.8 million for the three-month period ended March 31, 2024. This decrease was primarily due to a decrease of $3.7 million in broadcast advertising revenue, and a decrease of $1.1 million in retransmission consent revenue, partially offset by an increase of $0.1 million in digital advertising revenue.
In general, many of our broadcast stations face declining audiences, which we believe is present across the traditional broadcast industry, competitive factors with the other major Spanish-language broadcasters, and changing demographics and preferences of audiences, particularly younger audiences, in terms of the media they prefer to consume, including streaming and social media. We anticipate that these changes in viewer habits will persist at least for the foreseeable future and possibly permanently. Additionally, we have previously noted a trend for advertising to move increasingly from traditional media, such as television and radio, to new media, such as digital media, and we expect this trend will also continue. While we believe that none of these new technologies and services can completely replace local broadcast stations due to the element of localism that broadcasting offers, the challenges we face in our broadcast operations from new technologies and services will continue to require attention from management. We must continue to remain vigilant to meet these changes, including the need to further adjust our business strategies accordingly, including through an emphasis on local news and increased digital offerings, and their integration with our broadcast offerings. No assurances can be given that such strategies will be successful.
Cost of revenue. Cost of revenue in our media segment increased to $3.3 million for the three-month period ended March 31, 2025 from $2.9 million for the three-month period ended March 31, 2024, primarily due to the increase in digital advertising revenue and a decrease in gross margins.
Direct Operating Expenses. Direct operating expenses in our media segment remained constant at $26.6 million for the three-month periods ended March 31, 2025 and 2024.
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Selling, General and Administrative Expenses. Selling, general and administrative expenses in our media segment increased to $10.8 million for the three-month period ended March 31, 2025 from $10.0 million for the three-month period ended March 31, 2024, primarily due to an increase of $1.0 million in salaries and other employee benefits, and an increase of $0.8 million in expenses due to the realignment of our operations as noted above. The increase was offset by a decrease of $0.5 million in bad debt expense and other items which were individually immaterial.
Advertising Technology & Services
Net Revenue. Net revenue in our advertising technology & services segment increased to $50.9 million for the three-month period ended March 31, 2025 from $32.4 million for the three-month period ended March 31, 2024. The increase was primarily due to increases in advertising revenue from Smadex and Adwake.
Cost of revenue. Cost of revenue in our advertising technology & services segment increased to $30.2 million for the three-month period ended March 31, 2025 from $19.8 million for the three-month period ended March 31, 2024, primarily due to costs associated with the increase in digital advertising revenue.
We have previously noted a trend on a global basis in our advertising technology & services operations whereby revenue is shifting more to programmatic revenue. As a result, advertisers are demanding more efficiency and lower cost from intermediaries like us. In response to this trend, we have been offering our programmatic purchasing platform, Smadex, to advertisers. The digital advertising industry remains dynamic and is continuing to undergo rapid changes in technology, customer expectation and competition. We expect this trend to continue and possibly accelerate. We must continue to remain vigilant to meet these dynamic and rapid changes, including the need to further adjust our business strategies accordingly. No assurances can be given that such strategies will be successful.
Direct operating expenses. Direct operating expenses in our advertising technology & services segment increased to $9.0 million for the three-month period ended March 31, 2025 from $5.2 million for the three-month period ended March 31, 2024, primarily due to an increase of $3.3 million in cloud infrastructure expenses and an increase of $0.5 million in salaries.
Selling, general and administrative expenses. Selling, general and administrative expenses in our advertising technology & services segment increased to $4.7 million for the three-month period ended March 31, 2025, from $4.4 million for the three-month period ended March 31, 2024, primarily due to items which were individually immaterial.
Liquidity and Capital Resources
While we have a history of operating losses in some periods and operating income in other periods, we also have a history of generating significant positive cash flows from our operations. We had net loss attributable to common stockholders of $148.9 million and $15.4 million for the years ended December 31, 2024 and 2023, respectively, and net income attributable to common stockholders of $18.1 million for the year ended December 31, 2022. We had positive cash flow from operations of $74.7 million, $75.2 million and $78.9 million for the years ended December 31, 2024, 2023 and 2022, respectively. We had negative cash flow from operations of $15.2 million for the three-month period ended March 31, 2025. For at least the next twelve months, we expect to fund our working capital requirements, capital expenditures and payments of principal and interest on outstanding indebtedness, with cash on hand and cash flows from operations.
We currently believe that our cash position is capable of meeting our operating and capital expenses and debt service requirements for at least the next twelve months from the issuance of this report. We believe that our position is strengthened by cash and cash equivalents on hand, in the amount of $73.6 million, and available for sale marketable securities in the additional amount of $4.5 million, as of March 31, 2025. Our liquidity is not materially affected by the amounts held in accounts outside the United States.
On March 4, 2024, we received a communication from Meta that it intended to wind down its authorized sales partner, or ASP, program globally and end its relationship with all of its ASPs, including us, by July 1, 2024. As a result, we conducted a thorough review of our digital strategy, operations and cost structure, and during the second quarter of 2024 made the decision to dispose of the operations of EGP, our digital commercial partnerships business, which was completed during the second quarter of 2024.
The disposition of our EGP business, the largest business unit of what was then our digital segment, has had, and will continue to have, a material effect on our results of operations in that total revenue from our advertising technology & services operations, and consolidated revenue, has been, and is expected to remain, significantly lower than it was prior to the disposition of our EGP business. As a result, cash flow from operations will be materially adversely affected in future periods, which could also adversely affect our liquidity and, as discussed below, our ability to comply with financial covenants under the 2023 Credit Agreement.
The 2023 Credit Agreement contains various financial covenants (see Note 2 to Notes to Condensed Consolidated Financial Statements). Under the terms of our 2023 Credit Agreement, consolidated EBITDA is a measure that governs several critical aspects of our 2023 Credit Facility, including, among other things, financial covenants with which we must comply and financial ratios which we must maintain in order to borrow funds needed for the operation of our business and with respect to the interest rates that we pay on our 2023 Credit Facility. For example, our 2023 Credit Agreement contains a total net leverage ratio financial covenant. The total net leverage ratio, or the ratio of consolidated total debt (net of up to $50.0 million of unrestricted cash) to trailing-twelve-month consolidated EBITDA, affects both our ability to borrow from our Revolving Credit Facility and our applicable margin for the interest
30
rate calculation. Under our 2023 Credit Agreement, our maximum total leverage ratio may not exceed 3.25 to 1.00. In addition, our 2023 Credit Agreement contains an interest coverage ratio financial covenant (calculated as set forth in the 2023 Credit Agreement), with a minimum permitted ratio of 3.00 to 1.00.Consolidated EBITDA is a non-GAAP measure. The most directly comparable GAAP financial measure to consolidated EBITDA is net income (loss) attributable to common stockholders.
As of March 31, 2025, we were in compliance with the financial covenants in the 2023 Credit Agreement. Compliance with these financial covenants is measured quarterly and our failure to meet the covenant requirements would constitute an event of default. In such event, if we were unable to obtain the necessary waivers or amendments, all outstanding borrowings, together with accrued and unpaid interest and other amounts payable thereunder, would become immediately due and payable. Additionally, the lenders would have the right to proceed against the collateral granted to them to secure that debt, which includes substantially all of our assets.
We have taken action to reduce certain expenses, including a reduction in the base salary and cash bonus components of our three most senior executives' compensation. In addition, as discussed above, we have an aggregate $78.1 million of cash and marketable securities as of March 31, 2025, and management projects that we could prepay debt as necessary to remain in compliance with our financial covenants under the 2023 Credit Agreement should that become necessary.
Based on management’s current financial projections and our ability to prepay our debt, management believes that we will maintain compliance with our financial covenants under the 2023 Credit Agreement. However, given the inherent uncertainty in financial projections, management has identified additional controllable cost reduction actions that can be taken, if necessary, to maintain sufficient liquidity to fund our business activities and maintain compliance with our financial covenants under the 2023 Credit Agreement. Management further believes that our existing cash and projected operating cash flows are adequate to meet our operating needs, liabilities and commitments over the next twelve months from the issuance of the accompanying consolidated financial statements.
To the extent that our then-current liquidity is insufficient to fund our business activities or if we do not remain in compliance with our financial covenants under the 2023 Credit Agreement, as a result of not achieving financial projections or otherwise, we may be required to take additional actions which could include seeking additional equity or debt financing in the future to satisfy capital requirements. There is no guarantee that any such capital would be available to us on favorable terms or at all. The failure to obtain any required capital could have a material adverse effect on our operations and financial condition.
Credit Facility
On March 17, 2023, we entered into the 2023 Credit Facility, pursuant to the 2023 Credit Agreement, by and among us, Bank of America, N.A., as Administrative Agent, and the other financial institutions party thereto as Lenders (collectively, the “Lenders” and individually each a “Lender”). The 2023 Credit Agreement amended, restated and replaced in its entirety our previous credit agreement.
In March 2024, we made a prepayment of $10.0 million, of which $8.75 million was applied to the upcoming quarterly principal payments in 2024 under the Term A Facility (as defined in the 2023 Credit Agreement), and $1.25 million was applied to the Revolving Credit Facility (as defined in the 2023 Credit Agreement).
In June 2024, we made an additional prepayment of $10.0 million, of which $4.9 million was a mandatory prepayment as a result of the EGP disposition. The prepayment was applied to the quarterly principal payments in 2025 under the Term A Facility.
For more information, see Note 2 to Notes to Condensed Consolidated Financial Statements.
Cash Flow
Net cash flow used in operating activities was $15.2 million for the three-month period ended March 31, 2025, compared to net cash flow provided by operating activities of $33.4 million for the three-month period ended March 31, 2024. The decrease in cash flow from operating activities was primarily due to a decrease in net changes in our working capital of negative $20.9 million for the three-month period ended March 31, 2025 compared to positive $28.3 million for the three-month period ended March 31, 2024. The net changes in working capital were primarily due to the timing of cash payments to publishers and collections from customers. The decrease in cash flow from operating activities was also due to an increase in net loss after adjusting for non-cash items. Significant non-cash items in the three-month period ended March 31, 2025 included impairment charges of $23.7 million, loss on lease abandonment charges of $25.2 million, depreciation and amortization expense of $3.5 million, deferred income taxes of $1.5 million, and non-cash stock based compensation of $2.6 million. Significant non-cash items in the three-month period ended March 31, 2024 included impairment charges of $49.4 million, depreciation and amortization expense of $7.1 million, non-cash stock based compensation of $5.4 million, change in fair value of contingent consideration of $1.4 million, deferred income taxes of $4.2 million, and income attributable to redeemable noncontrolling interest of $2.8 million. We expect to have positive cash flow from operating activities for the full year 2025.
Net cash flow used in investing activities was $2.5 million for the three-month period ended March 31, 2025, compared to net cash flow provided by investing activities of $6.1 million for the three-month period ended March 31, 2024. The decrease in net cash flow used in investing activities was primarily due to a reduction in proceeds from the sale of marketable securities to $0.4 million for the three-month period ended March 31, 2025 compared to $8.8 million for the three-month period ended March 31, 2024. We
31
anticipate that our capital expenditures will be approximately $7.0 million during the full year 2025. The amount of our anticipated capital expenditures may change based on future changes in business plans and our financial condition and general economic conditions. We expect to fund capital expenditures with cash on hand and net cash flow from operations.
Net cash flow used in financing activities was $4.6 million for the three-month period ended March 31, 2025, compared to $16.8 million for the three-month period ended March 31, 2024. The decrease in cash flow used in financing activities was primarily due to $10.3 million of payments on debt during the three-month period ended March 31, 2024, payments of contingent consideration of $0.9 million for the three-month period ended March 31, 2024, and distributions to noncontrolling interest of $1.1 million for the three-month period ended March 31, 2024, all of which did not recur in the three-month period ended March 31, 2025.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
General
Market risk represents the potential loss that may affect our financial position, results of operations and/or cash flows due to adverse changes in the financial markets. We are also exposed to market risk from changes in the base rates on our 2023 Credit Facility.
Interest Rates
As of March 31, 2025, we had $187.8 million of variable rate bank debt outstanding under our 2023 Credit Facility. Our borrowings bear interest on the outstanding principal amount thereof from the date when made at a rate per annum equal to either: (i) the Term SOFR (as defined in the 2023 Credit Agreement) plus a margin between 2.50% and 3.00%, depending on the Total Net Leverage Ratio (as defined in the 2023 Credit Agreement) or (ii) the Base Rate (as defined in the 2023 Credit Agreement) plus a margin between 1.50% and 2.00%, depending on the Total Net Leverage Ratio. In addition, the unused portion of the Revolving Credit Facility is subject to a rate per annum between 0.30% and 0.40%, depending on the Total Net Leverage Ratio.
Because our debt is subject to interest at a variable rate, our earnings will be affected in future periods by changes in interest rates. If the SOFR were to increase or decrease by a hypothetical 100 basis points, or one percentage point, from its March 31, 2025 level, our annual interest expense would increase or decrease, respectively, and cash flow from operations would decrease or increase, respectively, by $1.9 million based on the outstanding balance of our term loan as of March 31, 2025.
Foreign Currency
We have certain foreign currency risks related to our revenue and operating expenses denominated in currencies other than the U.S. dollar. Historically, our revenues have primarily been denominated in U.S. dollars, and the majority of our current revenues continue to be, and are expected to remain, denominated in U.S. dollars. However, we have operations in countries other than the United States, primarily related to our advertising technology & services operations, and we expect a portion of our future revenues will be denominated in currencies other than the U.S. dollar, primarily the Euro. The effect of an immediate and hypothetical 10% adverse change in foreign exchange rates on foreign-denominated accounts receivable at March 31, 2025 would not be material to our consolidated results of operations or overall financial condition.
Our operating expenses are primarily denominated in U.S. dollars. In addition, certain of our operating expenses are denominated in the currencies of the countries in which our operations are located, primarily Spain. Currency fluctuations or a weakening U.S. dollar can increase the amount of operating expense of our international operations, which are primarily related to our advertising technology & services operations. Increases and decreases in foreign-denominated revenue from movements in foreign exchange rates are partially offset by corresponding decreases or increases in foreign-denominated operating expenses.
To date, we have not entered into any foreign currency hedging contracts, since exchange rate fluctuations historically have not had a material effect on our operating results and cash flows.
ITEM 4. CONTROLS AND PROCEDURES
We conducted an evaluation, under the supervision and with the participation of management, including our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this quarterly report. Based on this evaluation, our chief executive officer and chief financial officer concluded that, as of the evaluation date, our disclosure controls and procedures were effective.
Our disclosure controls and procedures are designed to ensure that the information relating to our company, including our consolidated subsidiaries, required to be disclosed in our SEC reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow for timely decisions regarding required disclosure.
Our management, including our chief executive officer and chief financial officer, does not expect that our disclosure controls or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
There have not been any changes in our internal control over financial reporting during the period covered by this quarterly report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II.
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are subject to various outstanding claims and other legal proceedings that may arise in the ordinary course of business. In the opinion of management, any liability that may arise out of or with respect to these matters will not materially adversely affect our financial position, results of operations or cash flows.
ITEM 1A. RISK FACTORS
None.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS, AND ISSUER PURCHASES OF EQUITY SECURITIES
Issuer Purchases of Equity Securities
On March 1, 2022, our Board of Directors approved a share repurchase program of up to $20 million of our Class A common stock. Under this share repurchase program, we are authorized to purchase shares of our Class A common stock from time to time through open market purchases or negotiated purchases, subject to market conditions and other factors.
We did not repurchase any shares of our Class A common stock during three-month periods ended March 31, 2025 and 2024. As of March 31, 2025, we have repurchased a total of 1.8 million shares of our Class A common stock under this share repurchase program for an aggregate purchase price of $11.3 million, or an average price per share of $6.43. All such repurchased shares were retired as of March 31, 2025.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
Insider Trading Arrangements
During the quarter ended March 31, 2025, none of our directors or officers informed us of the
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ITEM 6. EXHIBITS
10.1(1)† |
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Letter Agreement, dated April 4, 2025, by and between the Company and Michael Christenson |
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10.2(1)† |
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Letter Agreement, dated April 4, 2025, by and between the Company and Jeffery Liberman |
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10.3(1)† |
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Letter Agreement, dated April 4, 2025, by and between the Company and Mark Boelke |
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31.1* |
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31.2* |
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32* |
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101.INS* |
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Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. |
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101.SCH* |
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Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents. |
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104 |
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Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101). |
* Filed herewith.
† Management contract or compensatory plan, contract or arrangement.
(1) Incorporated by reference from our Current Report on Form 8-K, filed with the SEC on April 7, 2025.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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ENTRAVISION COMMUNICATIONS CORPORATION |
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By: |
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/s/ MARK BOELKE |
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Mark Boelke Chief Financial Officer and Treasurer |
Date: May 8, 2025
36
Exhibit 31.1
Certification of Chief Executive Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
and Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934
I, Michael J. Christenson, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of Entravision Communications Corporation;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financing reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: May 8, 2025
/s/ Michael J. Christenson |
Michael J. Christenson Chief Executive Officer |
Exhibit 31.2
Certification of Chief Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
and Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934
I, Mark Boelke, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of Entravision Communications Corporation;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financing reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: May 8, 2025
/s/ Mark Boelke |
Mark Boelke Chief Financial Officer |
Exhibit 32
Certification of Periodic Financial Report by the Chief Executive Officer and
Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Solely for the purposes of complying with 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, we, the undersigned Chief Executive Officer and Chief Financial Officer of Entravision Communications Corporation (the “Company”), hereby certify, based on our knowledge, that the Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2025 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: May 8, 2025 |
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/s/ Michael J. Christenson |
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Michael J. Christenson Chief Executive Officer |
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Date: May 8, 2025 |
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/s/ Mark Boelke |
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Mark Boelke Chief Financial Officer |